Destroying Free Market Economics, Threatening Reason, Peace and Wealth
Keyensian Economic Theory is only useful until it isn’t. What prevails in the end is history and Austrian Economics. Keynsians vs Austrians – who is right and who is wrong? Mike Maloney surmises that economic theories reflect different attitudes of human nature and are bound to change over time. Economic theories are constantly being proven, disproven and revised. However, when a theory is wrong, millions of innocent people can be negatively affected. Ricardo, then the Communist Manifesto, Marx and Ingells, the Republic to Das Kapital. Marshall described in Classical Economics how we need capitalism and free markets, more so than communism. There has always been a strong divide between the two ideologies. Enter Keynes with his General Theory of Money, along with John Hicks. Keynes claimed the need for government intervention – while this didn’t directly support communism it absolutely challenged classical economic theory, opening the doors to creeping government involvement, or socialism. Private property and markets with heavy regulation, corporation, and continuous economic expansion.
The causes of all panics, crashes and depressions can be summed up in only four words: the misuse of credit. –L.von Mises
The Austrian school of economics, Hayek and Von Mises, argued that regulation and government tinkering is a problem not a solution. Enter also Milton Friedman who writes about the truth that economic collapses are due to failed government policy. Stagflation is a troubling concept for Keynesians but not students of the Chicago School of Economics. Monetarism pushed slow and steady growth; supply side economics advocated cutting taxes. We now live in a new Neoclassical economic system. This is evident in not both economics and Neoliberal policies. A melding of all of the above theories. Keynesian purports deficit spending. Austerity reins in excess spending. Once strict communist countries have since trended socialist. Many capitalist countries are now converging toward the middle of socialism at record pace.
Ideas shape the course of history. –J. M. Keyens(Image, NY Times 2010)
Inflation is a side effect of aggregate demand/deflation is because people don’t want to buy material objects. [Keynsians say] they believe in predictable behavior.
Deflation is a collapse of demand as a reaction – the root cause of deflation is a scare such as a stock market bubble popping, decrease in income, fear or just exhaustion from debt and inability to borrow to buy more. This follows a more Austrian approach to reality.
The four most dangerous words in economic chatter are, “This time it’s different”.
Central banking destroys the purpose of a bank. A bank is meant to be an intermediary, a trust party in a transaction and a place to
store valuable assets. I suppose that is to say, pre-1913 banks are valuable and essential to production, manufacturing etc. The Central Bank has absolutely corrupted the entire economic system and defiled the art of business.
Central Banks are a threat to logic and reason – what did old philosophers and Founding Fathers believe about a Central Bank?
Milton Friedman: Economist. Supporter of free market capitalism with little government intervention. Adviser to Ronald Reagan and Margaret Thatcher.Believed that inflation was the result of excess supply of money produced by the central banks.
Karl Marx:Left wing – Communist. The co-writer of “The Communist Manifesto.” Wanted to abolish private property and centralize production.Believed in a centrally planned, or command economy.
Adam Smith:Classical liberalist. The writer of “The Wealth of Nations,” which helped shape modern economics.Believed in free-market, laissez faire capitalism and the idea of that the economy would regulate itself – also known as “The Invisible Hand.” Believed that people would work for their own self-interests.
Pete Hoekstra:Believed that choices abound in the free market. Choice creates real and immediate accountability.
Vitalik Buterin: co-founder of Ethereum; states “Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.”
(Image source: YouTube, 2017)
Gerald Celente: Author, Trends Journal. “What wars in history were fought over the failures of central power and central banking? ALL WARS ARE BANKERS WARS.2 Central Banking is blatant usury.”
Sir Josiah Stamp:President of the Bank of England in the 1920s, the second richest man in Britain; “The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers andpay for the cost of your own slavery, let them continue to create deposits.”
Benjamin Franklin: Argued against King George III’s Currency Act: “You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that [money] which circulates all bears the endless burden of unpayable debt and usury…..In the Colonies, we issue our own money. It is called Colonial Scrip [interest-free, wealth-based money issued by The Colonies 1750-1764 before Bank of England crooks made it illegal]. We issue it in proper proportion to make the products pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one.”
Working with central banks and expecting the free market to win is akin to building a skyscraper in zero gravity. Much less possible in the end, actually. Central Banking by virtue of the animalistic nature of devouring imaginary money to buy real goods and services and expecting the profits to trickle down is a revolting idea.
What is an economic collapse exactly? According to Investopedia, the money hub, it is ‘a breakdown of a national, regional, or territorial economy that typically follows a time of crisis. An economic collapse occurs at the onset of a severe version of an economic contraction, depression, or recession and can last any number of years depending on the severity of the circumstances.’3
Michael Snyder, a former lawyer on K Street in DC, writes an insurmountable breakdown of the hushed breakdown of our economy due to the poor money printing and bookkeeping principles. To see clearly how fiat money has been adversely affecting the world since 1971, to better understand the controlled takeover of currency, the Economic Collapse Blog is a great site. That internet library has a litany of records, analytics and bar-none the hardest hitting evidence of the single greatest threat to reason and peace in the world – fake money from nowhere. He talks a lot of helicopter money and inflationary tactics used by central bankers.4
Central bank monetary policy today undermines free markets by the continuous creation of untold amounts of debt. With unlimited debt, money is continuously borrowed into existence and unfairly as well as disproportionately inflates the cost of everything required for daily living: food, shelter, and clothing. Not only do the costs of basic necessities inflate, but the fiat currency backed by nothing, absolutely nothing, is diluted and devalued time after time until it is unrecognizable and fully worth nothing. This is so repulsive, so difficult to grasp. This contradicts the cycles of any free economy. In a free economy, supply and demand will fluctuate and cycle every seven years on average. The rise to apex of the free market is approximately every 3.5 years. The bell curve does justice to a free market. At the seventh year, there should be a natural decline and a contraction of supply with a need for demand that builds into yet another peak market cycle. In theory, this works. But when money is artificial at its core, the cycles do not follow suit and how can any entity possibly predict market turnover, profitability or any other details?
Also, with that kind of printing and inflation and devaluation, it is impossible for an average hard-working individual to save money or store wealth. The basics become unaffordable and purchase power diminishes and the general cost of goods and services inflates with such a diluted money supply and continued borrowing, the costs of which are always passed on to consumers. The purchase power of a society is eroded, but an entire nation’s ability to store wealth is decimated. We are living this scenario out in 2019.
Helicopter Money. Image courtesy, Zero Hedge, 2018.
What will it take for an entire society to revert to a reasonable means to an end mentality? First, we would have to have a serious change in the normalcy bias. We live in a nation of affluence and affinity to the max. As hard as it is to believe, this will change. It will take time, perhaps two or more generations. We will have to fall on our proverbial sword, unfortunately. And that is when the New Money System will come to fruition.
As the Four Horsemen, a superb documentary mentions, decadence and the obsession with food and lust always befall a society before its fall. If you look closely around, there is no way to not see this occurring. The exuberant lifestyles of every minimum wage employee, the fact that everyone has the latest technology, a flash car and matching payment, maximal rent and the inability to afford to live a quiet rural lifestyle. Everyone has become dependent on the urban neural network. Eventually, what goes up must come down. What evolves will similarly devolve. We always return to our roots.
GDP growth rates have stalled in the past two years and we have recently seen a sizeable bond yield curve inversion. This is a warning sign flashing, telling us in America that the rest of the world sees what is happening. They are abandoning T-Bills and Bonds, sending our helicopter money back to its nest. They have exchanged it for infrastructure and mineral or water rights. We’ll be seeing this trickle into tarrifs and sanctions as yet again, our own government pumps up a war narrative to print money, get buy-in and continue the madness. The failure of growth and reality of contraction are going to be a painful reality for the unaware among us. And unfortunately, they are many. For those of us with some savvy, there are new emerging trends and cryptocurrencies. When fiat fails, it is best to keep personally isolated and store wealth in a vehicle that will actually transport that wealth into the New Economy and a new era. Perhaps this seems disingenuous, but perhaps we are carving our future and certainly we must be engaged in so doing.
- Ron Paul, Lew Rockwell, Ludwig von Mises
- Gerald Celente, Trends Journal.
- https://www.youtube.com/watch?v=bdnmmsu6PAA Four Horsement Doc.